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Directors and corporate officers of Transfield Services could face legal liability over the failure to disclose its contribution to human rights abuses

The failure of Transfield Services to disclose its contribution to human rights abuses at the Nauru and Manus Island detention centres could see its directors and corporate officers face legal liability, a new group has warned.

The No Business Against Abuse group has been quietly working to persuade investors to put pressure on Transfield over its role managing Australia’s asylum seeker processing centres on Nauru and Manus Island by divesting, and encouraging local businesses not to contract with the company.

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NBIA, which launched publicly in partnership with activist group GetUp and began publicly seeking supporters over the weekend to sign their pledge, has met with a number of Transfield investors and key members of the company’s management.

The group has capitalised on momentum building with pressure from groups such as the Australian Nursing and Midwifery Federation, refugee group Rise and other advocacy organisations on the corporate players involved in Australia’s detention centres.

While the group had largely been working behind the scenes for some time, Transfield Services then took the unusual step of circulating a statement to investors to defend its management of the Manus Island and Nauru detention centres.

The lengthy statement distributed by the company in September sought to diminish extensive media reporting, Senate inquiries and independent investigations that have highlighted systemic abuse and failures to handle serious incidents at the Nauru and Manus detention centres.

NBIA hit back in response, saying the company had failed to disclose a series of relevant and recent findings by domestic and legal authorities. Crucially, it also said the company’s officers could face liability for failing to outline some of these issues.

“NBIA has concerns regarding a number of aspects of the Transfield statement. In summary these concerns are that Transfield’s statement … fails to disclose that causing or contributing to human rights abuses may give rise to individual liability for Transfield directors, officers and employees, legal, financial and reputational risks for Transfield and contravention of the policy and practice commitments of many of Transfield’s investors, financiers and clients,” the NBIA response said.

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The Australian Securities Exchange guidelines for public companies recommends entities disclose any “material exposure to economic, environmental and social sustainability risks.”

The executive director of NBIA, Shen Narayanasamy, who is also the human rights director of GetUp, said Transfield was underestimating investors’ concern.

“The release of the statement indicates that they are sensitive to the reputational, financial and legal risks associated with detention, but I think it simultaneously means that they are not addressing them in a way that reasonable people would find adequate,” she said.

“They are underestimating a substantial level of concern in the investment community regarding the offshore detention centres.”

Narayanasamy said the group would now be seeking public support and preparing for the release of its first report.

“From there what we’re going to do is demonstrate the extent to which the Australian community is committed to businesses disavowing any connection with abuse,” she said.

She urged the company to “better disclose the situation to its investors and have better transparencies to its investors so they can greater assess the risk.”

Transfield circulated their statement to investors in an attempt to stay the growing momentum of the NBIA campaign. The company actively sought to play down the human rights obligations it was required to adhere to under Australian law.

While Australia has signed the Universal Declaration of Human Rights, the International Convention on Civil and Political Rights and other conventions, it has not enacted them in domestic law.

The company statement said: “International human rights instruments are not designed to create legal obligations on Australian companies. Australian law binds Australian companies.”

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It continues: “Transfield Services is aware that assertions have been made that the company and its directors and officers could be sued in connection with breaches of ‘human rights’ and other ‘international laws’. There is no legitimate basis for these assertions. While OECD guidelines allow for complaints to be made to the Australian government, in the unlikely event the Australian government recognised a complaint about the company, it has no power to enforce any finding.”

The company went on to state the board of directors has approved a new human rights statement and a series of human rights conduct business principles in June 2015.

The company also said “much of their source data regarding conditions on Manus and Nauru is based on outdated public information, and is therefore incorrect”.

The statement said the company thoroughly investigates misconduct, and claimed “investigations show no evidence to support the majority of these allegations”. It added no Transfield Services employee has been charged with an offence relating to an asylum seeker, but said in a small number of cases staff acted “in a manner that is inconsistent with our expectations”.

But NBIA said in response the group relied on “publicly verifiable documentation in our conclusions, to ensure our statements themselves are able to be verified by others”.

It said the company had failed to disclose relevant findings from the recent majority Senate report into Nauru, which found conditions at the centre are not adequate, and there are “striking gaps” in the discipline and professionalism of contractors.

The inquiry report found the Nauru detention centre was not a safe environment for asylum seekers, and called for children to be removed from the centre.

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Since the company took over the management of the centre, subcontractors it bears responsibility for have been accused of sexual assault, abuse and other serious offences. In June 2014 a Transfield cleaner was alleged to have touched a child asylum seeker’s genitals.

Former Save the Children case manager Viktoria Vibhakar has extensively documented allegations of abuse at the centre, a number of which relate to Transfield’s subcontractors, drawing on incident reports and logs from the detention facility.

Doubts have repeatedly been cast on the ability and willingness of the Nauruan police force to effectively police serious allegations of abuse in the detention centre, including by former Nauru magistrate Peter Law and a former senior government advisor Caz Coleman.

Transfield also sought to diminish the impact of a new disclosure offence introduced in May, that sought to further criminalise disclosures of information across detention centres under the Border Force Act. The new disclosure offence has limited exemptions, and more than 40 former detention staff signed an open letter to the federal government in open defiance of the new law.

The Transfield statement said: “It is factually incorrect to assert that the new legislation in any way prevents service providers (including medical practitioners) from reporting any suspected wrongdoings. The pre-existing channels remain in place and are effective. Claims to the contrary by news outlets, social media, NGOs and some politicians are baseless.

The NBIA response said “it is reasonable to assert that the institution of a criminal offence for disclosure of information is likely to prevent service providers (including medical professionals) from disclosing information regarding wrongdoing”.

“The criminal law is designed to operate as a disincentive in regards to actions deemed to be offences. It is hardly “baseless” to view it as such.”

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Guardian Australia has obtained emails from a Save the Children manager on Nauru who warned staff not to speak out about “anything that happens” on Nauru and Manus Island because of the disclosure offence. Various legal groups have also warned the new offence will make it more difficult to make public disclosures and will create an additional chilling effect on speaking out.

NBIA’s board is made up of key figures involved in human rights and refugees advocacy, including Narayanasamy, who is also the human rights campaign director of GetUp, and Misha Coleman from the Australian Churches Refugee Taskforce.

Jacob Varghese from Maurice Blackburn Lawyers, Luke Hilakari from the Victorian Trades Hall, Waleed Muss from the board of directors of Rise and Brigid Arthur from the Brigidine Asylum seeker project are also board members.

Transfield has been named as the preferred tender for the next contract for the management of both detention centres, but its latest financial report saw its profits drop by 8%.

The company has seen a series of divestments in recent months, with industry super fund Hesta selling its 3% stake in the company, and NGS super also agreeing to sell its shares.